Correlation Between Allianzgi Diversified and Goldman Sachs

Can any of the company-specific risk be diversified away by investing in both Allianzgi Diversified and Goldman Sachs at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Allianzgi Diversified and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Allianzgi Diversified Income and Goldman Sachs Small, you can compare the effects of market volatilities on Allianzgi Diversified and Goldman Sachs and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Allianzgi Diversified with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Diversified and Goldman Sachs.

Diversification Opportunities for Allianzgi Diversified and Goldman Sachs

0.51

Correlation Coefficient

Allianzgi Diversified  Goldman Sachs

Very weak diversification

The 3 months correlation between Allianzgi and Goldman is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Diversified Income and Goldman Sachs Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Small and Allianzgi Diversified is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Allianzgi Diversified Income are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Small has no effect on the direction of Allianzgi Diversified i.e., Allianzgi Diversified and Goldman Sachs go up and down completely randomly.

Pair Corralation between Allianzgi Diversified and Goldman Sachs

Considering the 90-day investment horizon Allianzgi Diversified Income is expected to generate 0.49 times more return on investment than Goldman Sachs. However, Allianzgi Diversified Income is 2.02 times less risky than Goldman Sachs. It trades about 0.09 of its potential returns per unit of risk. Goldman Sachs Small is currently generating about 0.01 per unit of risk. If you would invest  1,973  in Allianzgi Diversified Income on September 21, 2024 and sell it today you would earn a total of  215.00  from holding Allianzgi Diversified Income or generate 10.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Allianzgi Diversified Income  vs.  Goldman Sachs Small

Allianzgi Diversified

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Diversified Income are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable fundamental indicators, Allianzgi Diversified is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Goldman Sachs Small

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Allianzgi Diversified and Goldman Sachs

The main advantage of trading using opposite Allianzgi Diversified and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi Diversified position performs unexpectedly, Goldman Sachs can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.

The idea behind Allianzgi Diversified Income and Goldman Sachs Small pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.